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Biden won’t win his war with China America's gamble could up end the global status quo

The green fingered friends. Credit: Getty


May 18, 2024   5 mins

When Donald Trump introduced a series of tariffs on Chinese goods, just over five years ago, Joe Biden was among his fiercest critics. Trump, he said, was “crushing” American farmers, workers and consumers by sparking an “irresponsible trade war”, and he vowed to reverse his “senseless policies”. But once in power, Biden did the exact opposite: he actually strengthened Trump’s protectionist policies, launching “a full-blown economic war on China”. 

Last week, that war escalated to near-nuclear level as the White House announced massive tariff hikes on a raft of Chinese imports — including 25% on steel and aluminum, 50% on semiconductors and solar panels, and a staggering 100% on electric vehicles (EVs). The move, they say, is in response to “China’s unfair trade practices”. The US accuses Beijing of using hefty government subsidies to flood global markets with artificially low-priced exports. By imposing its swingeing tariffs, the US hopes to create “a level playing-field in industries that are vital to our future”, and “ensure America leads the world” in these sectors. 

It’s pretty ironic that Biden is attempting to level the playing-field by embracing similar tactics to Beijing. His administration’s much-vaunted Inflation Reduction Act includes almost $400 billion in subsidies (through grants, loans and tax credits) aimed at boosting the US cleantech sector. So Biden’s attempts to paint China as a rogue nation using “non-market practices” to “game the system” seem driven by fear that the Chinese subsidies risk nullifying the effect of America’s own subsidies. 

US Secretary of the Treasury Janet Yellen acknowledged as much when she said that “China is really not playing by the rules in the sense that they have enormous subsidies in critical areas of advanced manufacturing” and “[Biden] wants to make sure that the stimulus that’s being provided through the Inflation Reduction Act support[s] these industries”. She seemed blissfully unaware of the contradictory nature of her statement, barely concealed by the doublespeak: China “subsidises” its industries (bad), while the US “supports” them (good). 

But, then, the idea of America as a bastion of the free market, whose corporations achieved global success simply by relying on the animal spirits of capitalism and the sheer ingenuity of garage inventors à la Steve Jobs, is largely a myth. Everyone knows that Silicon Valley’s transformation into a hotbed of innovation, and the subsequent rise of the US tech industry, was made possible thanks to massive funding from the US government and military during the Cold War. Elon Musk is only the latest in a line of supposedly self-made garage inventors who have actually built their tech empire with the help of billions of dollars in US government subsidies. Just last year Tesla received $7.5 billion from the US government. 

China, then, isn’t really doing anything different from what the US has always done. But America is riled because China is winning. And having taken up the role of “free trade” defender — accusing the Biden administration of “imped[ing] the normal functioning of global industrial and supply chains” — Beijing is forcing the US to take an increasingly protectionist stance. 

This peculiar reversal of roles is paradigmatic of the significant global economic and geopolitical power shift underway. “Free trade” generally tends to benefit the dominant economic power, at the expense of weaker economies. It is no coincidence that the US began preaching “free trade” only after it achieved economic dominance, in the mid-20th century, after resorting to heavily protectionist measures to support its manufacturing sectors, just as Britain had done before it. 

But China has since surpassed the US as the world’s manufacturing powerhouse — and it has now climbed all the way to the top of the value chain. America’s embrace of protectionism is, therefore, an admission of weakness, as it is demoted to no-longer-hegemonic status. In this respect, it makes sense for the US to not want to be completely dependent on China in increasingly critical manufacturing sectors, and to build up its own cleantech industrial base. 

To shore this industry up, the US has been trying to nurture a domestic solar supply chain through a mix of tax incentives and tariffs for over a decade — but so far has failed abysmally. As the French entrepreneur and political commentator Arnaud Bertrand noted, while the tariffs did considerably reduce the number of Chinese solar panels coming to the US (with an 86% drop over the 2012-2020 period), the billions in subsidies, from first Obama and then Biden, did not revitalise the US solar industry.

On the contrary, the American global market share of the solar industry has considerably decreased since the original tariffs were placed on Chinese solar panels — from 9% in 2010 to 2% today. Meanwhile, China’s share of the industry rose from 59% to 78%. There’s no reason to believe that the recent tariff increase will reverse this trend. There’s even less hope that they will help spur a domestic EV industry. 

“It’ll be lucky if it can get its sub-imperial vassals in Europe and Asia to get on board with its short-sighted trade war.”

There’s also a catch-22 situation at play here. Because by shielding American car manufacturers from Chinese competition, any development is likely to be hindered. But without the tariffs, US car manufacturers will struggle to survive the decade since Americans cars cost between double or triple the amount of their Chinese equivalents. So the government may artificially prop up the American auto industry for a few more years, at the expense of American consumers — but by doing so, it is only delaying its death, not saving it. 

The idea that the tariffs will help America “lead the world” in this or other sectors where China already controls most of the global market share — such as steel, aluminium and EVs — is an economically illiterate one. Especially when you consider that the US market represents a relatively small share of Chinese global sales, and that America’s declining global status means it can no longer impose its will on other countries. It’ll be lucky if it can get its sub-imperial vassals in Europe and Asia to get on board with its short-sighted trade war. 

In fact, Biden’s EV tariff hike is already further weakening America’s crumbling powerhouse status. Those EU member states with big automotive ties to China, such as Germany and Sweden, have voiced their objections — reluctant to match the United States, or to put tariffs on the imports at all. “We don’t want to dismantle global trade, that’s a stupid idea”, Swedish Prime Minister Ulf Kristersson said. “Punitive tariffs as a one-size-fits-all solution is not a good idea for importing and exporting countries.” 

When we consider what kind of technologies are being targeted by the tariffs, the optics are even worse for Biden. For years he has presented himself as a champion of climate policies and emphasised the need to move towards low-emission technologies, one of the stated aims of the Inflation Reduction Act. Yet he is now attempting to punish China for managing to produce low-cost green tech, including EVs, that could turbo-charge the world’s next industrial revolution. Indeed, China has been able to achieve astounding results in this sector in large part because it has embraced much more ambitious green industrial policies than the West. Moreover, Biden’s imposition of these tariffs risks hindering the adoption of low-emission technologies by American businesses and consumers — and thereby thwarting the US’s own climate targets. It’s a messy own goal. 

Those sceptical of the need for climate policies and their achievements probably don’t think this is a big deal. But it is a big deal for a lot of people — especially Biden voters. And this policy, even though probably aimed at shoring up support for the President by showing voters that he is tough on China, could alienate many of those voters.

The economist Dani Rodrik captured the sentiment of many in the progressive camp when he said: “Put up tariffs if you must, but the moral, economic, environmental arguments are on the side of those that subsidise green products, not those who want to tax them.” You don’t have to agree with him to understand the huge political gamble that Biden has taken by declaring a full-blown trade war on China, the unintended consequences of which could cost him his presidency and hammer the final nail in the coffin of America’s powerhouse status.


Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.

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Alex Carnegie
Alex Carnegie
1 month ago

It is part of conventional Economics 101 that Free Trade is good in all circumstances. Which is part of the problem. Commitment to Free Trade has become less a proposition reflected upon rationally than an article of faith.

History suggests more nuanced responses such as: Free Trade is generally good but there are victims, sometimes nations and frequently a segment or region of a nation’s economy can suffer severely and, if one be a closet protectionist in a Free Trading system, then one can benefit disproportionally. Globalisation created hundreds of millions in the developing world. It also wiped out tens of millions of industrial jobs in the West.

The first wave of globalisation (1870-1914) had profound consequences. Overall, the global economy expanded dramatically but the protectionists in America and Germany did best of all. Meanwhile the economic devastation of the agricultural sector in the U.K., which remained committed to free trade, led not only to suffering but increased political radicalisation in Ireland and Scotland.

This time round, conventional wisdom ignores that the resulting decline in incomes in the West has proven politically destabilising – starting in America in the 1990s, spreading to much of Europe ten years later and beginning to impact even Germany now. The results have included Trump and the risk a spread of even more alarming candidates and parties the longer a third or more of the population faces stagnating or declining incomes.

The choice is between winding back globalisation to a a limited extent or waiting for a political explosion which will end it completely with 1930s style consequences.

Obviously, this is only one strand of the debate about trade and incomes. There are others about supply security, strategic balance, automation, immigration and so on. But it is enough to call into question the economic conventional wisdom extolled by Thomas Fazi.

Terry M
Terry M
1 month ago
Reply to  Alex Carnegie

Free trade is good when all players are friendly, cooperative partners, who play by the rules. Free trade is crazy when some of the partners are acting in bad faith.
A society should not let itself become dependent on a hostile country, which China certainly is, for critical goods. Food, medical supplies, vehicles, and a few other things need to be produced internally or come from friendly sources. In that sense what both Trump and Biden have done is reasonable, but they have focused on the wrong items, and, in Trump’s case, have put up barriers to our friends.
Who cares who makes solar panels – they are not a critical good and their manufacture is environmentally damaging. The same is true of almost all the ‘green’ economy goods without which we have fared very well for decades. That’s why the IRA giveaway to the Democrat green lobby is criminal. Some items – non-critical items – it is fine to outsource to unfriendly regimes.
Musk is not a fool to take government money, we are fools to let the government fund such lunacies.

john gill
john gill
1 month ago
Reply to  Alex Carnegie

I will dare to quote that crusty old heretic, the late Pat Buchanan: “Nations ascend on economic nationalism. They decline on free trade.”

The UK and the US provide plenty of evidence for both assertions. It’s time to ascend again.

As for the green lobby, why worry about their hysterics? Are we supposed to save the planet on the back of the American worker while China continues to belch polution round the clock? She did not become a leader in green energy products in order to fight global warming but but to line her pockets at the expense of gullible Western elites. Every EV or solar panel she makes has a passle of coal fired powerplants behind it.

Howard Clegg
Howard Clegg
1 month ago

China imports most of its energy.
The US is a net exporter of Energy.
China imports most of its food.
The US is a net exporter of food.
China imports most of its agricultural inputs.
The US could do without agricultural imports actually, as it has the single most fertile, accessible piece of contiguous farmland on the planet.
China is surrounded by enemies.
The US is surrounded by friends.
China has a demography that is beyond terminal.
The US has the healthiest demographic on the planet and is busy sucking up all the surplus young people over it’s southern border. And the US has the temerity to complain about this vast free lunch, so drunk are they on their geopolitical riches.

China has trouble projecting military power beyond the first Island chain.

The US projects military power globally, constantly and so seamlessly that is invisible to the casual observer. Blowhards only notice when it turns up on their doorstep in the form of a carrier battle group that could kill their country in an afternoon. And they have 11 of these monsters (or is it 12?) Oh, and a marine expeditionary force that could plant a flag on the rubble. If they wanted to. And they don’t, they just want you to shut up and do as you are told.

Capital flight from China has been accelerating for a while now. The days of the Chinese just chucking other people’s money at problems and lying about the results are coming to an end. China is just a massive sunk-cost problem.

The largest US corporations are already individually larger by market cap that the entire London stock exchange. That sucking sound you hear is the sound of global capital rushing to finance one of the largest re-industrialisation programs in history. And that’s actual industry, making actual stuff; not just online clicky clicky bullshit industry. Which they also control. Just ask Bytedance.

I could go on.

If you want to know what it’s like to go up against the US 1-on-1, just ask the Japanese. Now the US’s closest ally.

Geez! I wonder why?

Citizen Diversity
Citizen Diversity
1 month ago
Reply to  Howard Clegg

The Japanese don’t have any trouble with their borders. Nor any appreciable trouble with drugs.
Was it really the Japanese who decided to go head-to-head with the USA?
The USA’s withdrawal from Afghanistan was like the Romans withdrawing their legions from Britannia.

Micael Gustavsson
Micael Gustavsson
1 month ago

I guess he means WW2. In what way do you mean it wasn’t Japan who decided to go head to head with the US?

Alex Lekas
Alex Lekas
1 month ago
Reply to  Howard Clegg

The US has the healthiest demographic on the planet and is busy sucking up all the surplus young people over it’s southern border. 
It’s so healthy that one city after another is struggling with its budget, often prioritizing illegals over citizens, the latter not being particularly happy about that. Importing people who do not speak the language, are ignorant of or hostile to the culture, and have unknown skills – especially during a time of layoffs – is a poor strategy. Unless you aim to destabilize society, in which case it’s going great.

Terry M
Terry M
1 month ago
Reply to  Alex Lekas

Illegal immigration is a very serious problem as you point out. But legal immigration is still a net positive. Blame the Biden administration for mishandling the border – Trump will fix that.

Dave Canuck
Dave Canuck
1 month ago
Reply to  Terry M

He already had 4 years to build the wall, not much got done, don’t expect Trump to fix anything

P Branagan
P Branagan
1 month ago
Reply to  Howard Clegg

China surrounded by enemies? Says it all. Mr Clegg is obviously an idiot. Ignore

Liam F
Liam F
1 month ago
Reply to  P Branagan

Why? Please expand on your assertion.

Bret Larson
Bret Larson
1 month ago
Reply to  Howard Clegg

As a Canadian I’d much rather have a long border with the us than either China or Russia. In the last 200 years they have proven to be trustworthy neighbours and allies. Course good neighbours require good fences and currently that doesn’t require concertina wire.

Allison Barrows
Allison Barrows
1 month ago

I know that Fazi knows Biden doesn’t run anything, but it’s tiresome that we get these endless articles examining “Biden’s” policies. Just be f*cking honest and say the agencies currently in charge of the US are doing xyz while Biden sh*ts himself in public.

Micael Gustavsson
Micael Gustavsson
1 month ago

That is mostly MAGA propaganda.

james elliott
james elliott
1 month ago

“Last week, that war escalated to near-nuclear level as the White House announced massive tariff hikes on a raft of Chinese imports — including 25% on steel and aluminum, 50% on semiconductors and solar panels, and a staggering 100% on electric vehicles (EVs)”

Fazi is a moron. How on Earth is he writing for Unherd?

Biden has done very, very little right since entering office – but following Trump’s policy to crush China with tariffs is one thing that *is* a wise move.

The one thing that can cripple China is cutting off US consumers from the ability to buy cheap slave-made Chinese goods – and thus preventing them from financing the rope with which the CCP hopes to strangle us.

Without foreign trade, the CCP collapses – and if that happens there will be no nuclear war with China.

Peter B
Peter B
1 month ago
Reply to  james elliott

Seconded: Fazi is a moron.
As I posted on another forum yesterday, Napoleon famously advised “never interrupt your enemy when he is making a mistake”. China’s insane subsidies will bankrupt them in due course. The US is getting the good end of the deal today. China’s bad debts and xombie companies won’t be able to be hidden for ever. The CCP eventually collapses with free trade or without.

Terry M
Terry M
1 month ago
Reply to  Peter B

Add in the fallout from China’s one-child policy that is now leading to a population decline, and you have a terrible stew in the center country. Top-down control of industry, suppression of thought, and enforced conformity are all diseases that will slowly rot out China. But it will take some decades, so the West must survive the storm.

Peter B
Peter B
1 month ago
Reply to  Terry M

Don’t worry. It will. We’ve survived far worse in hte past. When we look back, I think we’ll recognise that 1980s Japan was a far more serious competitor to the US than China is today. Fundamentally corrupt, authoritarian countries can’t successfully innovate and create over the longer term – not when challenging the status quo is a life threatening condition.

UnHerd Reader
UnHerd Reader
1 month ago
Reply to  Peter B

Don’t know why the downvotes, I agree that genuine innovation does not come from subsidies and mass surveillance/thought control. China is very good at copying, less so at innovation, and I don’t know how it can innovate much when any serious company has to have its board attached to the CCP. How can you openly discuss new avenues of revenue when whole swathes of conversation are closed to you on pain of fines or prison? The answer is: you can’t.

Hopefully if we can stay true to the values of freedom on the west we can ride this one out but let’s see, we seem to be keen on hamstringing ourselves on that front recently

P Branagan
P Branagan
1 month ago
Reply to  Peter B

Peter B has constantly been among the most ignorant commenters on UnHerd.
He isn’t remotely in the same league as Mr Fazi who at least tries to deal with real world. Peter B simply indulges in twisted wishful thinking.

Peter B
Peter B
1 month ago
Reply to  P Branagan

I repeat yet again for the hard of listening/thinking/hearing: come back here again in 10 years, re read all this and test what you’ve written and predicted against reality.
Your blind hatred of the US and the West is preventing you from seeing things objectively.
I do agree with one thing – I’m not in the same league as Mr. Fazi ! Nor do I wish to join this ship of fools.

Bret Larson
Bret Larson
1 month ago
Reply to  james elliott

I don’t have a problem not trading with antagonistic societies.

Francis Twyman
Francis Twyman
1 month ago

So much denial here, face it , the US is in decline, China and Asia are rising, as has been the case since 2001. The pace will continue, in the space of 30 years China has risen from the ashes into a modern thriving economic and technology power house. The US has to deal with massive trade and budget deficits, and national debt which will be close to 50 trillion by the end of the decade. In addition to massive pension and medicare liabilities as the population ages. Meanwhile the US has immersed itself in costly and failing foreign wars like Afghanistan and Iraq which produced no tangible benefits other than fuelling the pockets of the military industrial complex. Of course the tariffs are desperation, it’s protectionism of industries that are failing to take off without massive subsidies and tariffs, Tesla is barely profitable, and Ford is losing 100k on every electric car they make. This will not end well, and Trump will make the inevitable decline even worse.

Peter B
Peter B
1 month ago
Reply to  Francis Twyman

Utterly delusional.
The US is in far better shape than China. Growing propulation, better demographics, leads in all the most profitable businesses. It also has millions of people queueing up to live there – so just how bad can it be ?
Go on hating the US if it makes you feel better. You’ll still be wrong. Read this again in 20 years time and you’ll realise how foolish you were.

Francis Twyman
Francis Twyman
1 month ago
Reply to  Peter B

I know it’s difficult to accept when you are in decline, all empires decline and fall eventually. Corporations are profitable because they outsource their production in foreign countries including China, India and others. China has enough people already, they don’t need more, the US is letting in migrants from South America for cheap labor, they are neither qualified nor educated. US cities are riddled with crime and major drug problems including an opioid crisis killing over 100k per year. Life expectancy is declining and the population is aging. Debt is out of control, a national debt crisis is coming in the next few years, and there is no leadership in government, fools like Trump will create more chaos, they will be so overwhelmed when the real crisis hits, and it won’t take 20 years for sure .

Samir Iker
Samir Iker
1 month ago
Reply to  Peter B

“It also has millions of people queueing up to live there”
It is amusing to hear that line, used to proclaim the supposed superiority of the West.
For several centuries, until the mid 20th century, it was Europeans who were queuing up to leave Europe.
In another few decades, the Indian and Chinese immigrants feeding the STEM sector in the West, and holding up services such as medicine and IT, will completely dry up. (Other, somewhat less useful immigrant streams will continue unabated though).
For most of human history, Asia has been the technological and economic powerhouse of humanity. The last 1-2 centuries was just a blip.

Peter B
Peter B
1 month ago
Reply to  Samir Iker

Once again, delusional.
If you’d been to Silicon Valley, you’d know that the flow of Asians isn’t drying up. In fact, they now lead many of the leading companies.
Watch what the smart people are doing and where they choose to go and live. It’s not China, India or Russia. Or Brazil. Or South Africa, Watch where they choose to invest their money.

Prashant Kotak
Prashant Kotak
1 month ago
Reply to  Francis Twyman

“…the US is in decline, China and Asia are rising…”

Agreed. This is why those zillions of young Mexicans have massed on the Khazak and Mongolian and Russian borders with China, climbing over barbed fences in the middle of the night, ramming the sentry-post gates, absolutely desperate to get into the earthly paradise that is the People’s Republic of China, because let’s face it, the youth unemployment rate in China of 20% is much better than the Mexican youth unemployment of 9%, and it’s a lot easier to sell your kidney to the Chinese who use it to make huǒ bào yāo huā, but the Mexicans have no use for kidney because they prefer pinto.
Hell, even the Irish are now queuing up to get into China, because Ireland is getting so very crowded with middle eastern migration and everything, for example our very own Philip Pilkington has already made his application at the Chinese embassy, and has set up a little tent in the CCP Refugee Resettlement Program in “Little Dublin” in Guangmang province, complete with pots and pans and a little guzunder, and of course a MacBook Pro M3 Retina, with 18 core GPU and 10 GB RAM, so he can continue writing for UnHerd while waiting in the queue. I’m sure the Italians will follow suit soon.

Dave Canuck
Dave Canuck
1 month ago
Reply to  Prashant Kotak

They happen to be living near the US border, that may have something to do with it. Most of them come from places like Honduras, El Salvador, etc, not Mexico so much now. China has too many people already and they have no way to get near there.

Prashant Kotak
Prashant Kotak
1 month ago
Reply to  Dave Canuck

They all flying, from Mexico to Mongolia – First Class, or Premium Economy if the people smuggler is charging too much. But that’s the luck of the draw. They are of course in 5* luxury once they manage to get into China.

Liam F
Liam F
1 month ago
Reply to  Prashant Kotak

Brilliant!

Alex Lekas
Alex Lekas
1 month ago

Four years in and finally, someone notices that all the pearl-clutching about Trump’s tariffs was so much theater. The people who complained then suddenly went silent when the Potato took office and they will continue to be silent if not applauding. Because it’s not about the policies. It’s never been about the policies. It’s always about the man and the power. Or the perception of power.

Andrew Boughton
Andrew Boughton
1 month ago

Goddamn brilliant as ever. This guy is sharp. We’re likely at opposite poles politically, yet he is a premier Realist in foreign policy.

Peter B
Peter B
1 month ago

The only way these people are “realists” is if they are “magic realists”. They certainly specialise in magical thinking.

Andrew Boughton
Andrew Boughton
1 month ago
Reply to  Peter B

Absolutely not, and therein lies the magic. You’re imagining things. Best live in the real world, and build your views from there.

Vesselina Zaitzeva
Vesselina Zaitzeva
1 month ago

Agreed.
While on some aspects with Mr Fazi we have diametrically opposed views, most of his articles are based on an in-depth analysis of well-presented facts and are very level-headed.

Andrew Boughton
Andrew Boughton
1 month ago

And a brilliant author.

alan bennett
alan bennett
1 month ago

So, a man who has taken tens of millions in bribes from the Chinese is destroying US industry.

Peter B
Peter B
1 month ago

What a complete load of hogwash.
“But China has since surpassed the US as the world’s manufacturing powerhouse — and it has now climbed all the way to the top of the value chain.”
No it isn’t. Couldn’t be more wrong.
Take semiconductors (silicon chips). Most of the top 10 companies are US-based and these are also highly profitable. China has spent 100s of $bns trying to break into this industry and what has it actually achieved ? Some success in high volume, very low margin, old technology chips and lost a huge amount of money propping up zombie companies which can’t compete at the high end.
Current glut of EVs – China’s not going to make any money on those.
And as for this:
“Everyone knows that Silicon Valley’s transformation into a hotbed of innovation, and the subsequent rise of the US tech industry, was made possible thanks to massive funding from the US government and military during the Cold War.”
Partially true at the very start (1950s and part of the 1960s). But this hasn’t been a relevant factor for 40 years – if it was ever true, it was before Mr. Fazi was born. He hasn’t got a clue what he’s talking about here.
The reason Silicon Valley is so successful is that it innovates very rapidly and makes commercial products that people want. The proportion of sales which are defence related is very small. And defence ceased to be the main technology driver decades ago.
Now Russia/Soviet Union and China really have relied on massive funding from their governments and militaries. And what have they actually achieved ?
You don’t know what you’re doing, Mr. Fazi.

Studio Largo
Studio Largo
1 month ago
Reply to  Peter B

You not insult mistah Fazi, he one of President Xi favorites. He good boy!

Michael James
Michael James
1 month ago

‘”Free trade” generally tends to benefit the dominant economic power, at the expense of weaker economies.’
How are Hong Kong and Singapore disadvantaged by free trade?

Peter B
Peter B
1 month ago
Reply to  Michael James

Precisely. There are plenty of rich small countries around the world. Because they follow successful policies. Often a better implementation of free trade than the US follows.
But you’re up against people who think that economics and trade are a zero sum game here. The fools.

UnHerd Reader
UnHerd Reader
1 month ago
Reply to  Peter B

Reminds me of a great historical documentary I watched about Britain and the industrial revolution – France was comparative by the 18thC and had similar brilliant scientific minds etc to the UK but they saw the world as ‘one big pie’. If you wanted to grow, then you had to take some pie from someone else. Whereas the British philosophy was that if you wanted to grow, just make your own pies, and make as many as you could

This, combined with the endless bureaucracy of France (every scientific and engineering development and discovery had to be properly logged in the system, approved by the heads of science etc) compared with ‘make it, see if it works and pay your taxes if it does ‘ mentality of the British were massive reasons why Britain ruled such a huge empire by the 20thC.

Shame many can’t understand free trade and are still stuck in 17thC zero sum ‘big pie’ thinking

kate Dunlop
kate Dunlop
1 month ago

All theatre…just how much does the “Big Guy” get from China?

P Branagan
P Branagan
1 month ago

Excellent article Mr Fazi.

Samuel Ross
Samuel Ross
1 month ago

This fellow is conducting his analysis with his end already in mind. No, China is not devoted to ‘free-market principles’. They will take your stuff, your ideas, your methods, your techniques, heavily support their homegrown industry, flood the market with cheap copycat goods, push you out of business, and then raise prices once they’ve achieved a complete Monopoly. Classic technique, but not very original of China ….. 😉

UnHerd Reader
UnHerd Reader
1 month ago
Reply to  Samuel Ross

Good post, the fact that China remains a totalitarian nominally communist state despite opening up ‘free’ markets tells you everything you need to know – they adopted capitalism through gritted teeth because the idiotic Marxist nonsense they had tried before killed millions of Chinese. They aren’t interested in free trade or free anything, just absolute power. Like all communists

Matt F
Matt F
1 month ago

China has been able to achieve astounding results in this sector in large part because it has embraced much more ambitious green industrial policies than the West. Really?
China is not only the worlds largest coal producer, but also importer and thus consumer, in the former and latter by a vast margin:
https://www.reuters.com/markets/commodities/global-coal-exports-power-generation-hit-new-highs-2023-2024-01-18/.
There is an obvious connection between this and it’s industrial success in “Green” technologies and much else.

UnHerd Reader
UnHerd Reader
1 month ago

Interesting article but on a tangential note, be careful what you wish for – for decades, in fact probably from way before the war, many people have begrudged the USA, declared it the World’s Greatest Evil and wished it would go away. Well now we might be seeing this wish come true. What happens when a dictatorship with an appalling human rights record, who keeps political enemies in concentration camps and who runs their foreign economic policies like the Mafia becomes the world’s most powerful country? Hardly an advert for democracy and freedom, and it will pull other countries into its orbit like some sort of reverse Kissinger plan.

We all know how stupid the extremes ends of the CND/anti-war/green (delete as appropriate) lobbies are, but now everyone (including the naïve idealists) gets to realise how ignorant their ideas always were

Peter B
Peter B
1 month ago
Reply to  UnHerd Reader

Don’t worry. China isn’t the world’s most powerful country. It’s not the world’s biggest economy and never will be now. We’ve passed peak China. The only question remaining is how the Chinese handle the disappointment.
We haven’t quite passed peak idiocy in the West yet (though you wouldn’t know from reading some of these comments). But I think that’s now quite close and that all the woke crap and Putin and China apologism will soon be in retreat.

Liam F
Liam F
1 month ago

“Especially when you consider that the US market represents a relatively small share of Chinese global sales,”
What is the source for this statement? The US is still Chinas largest export partner .
China has already peaked IMHO- to grow to replace the US it has to attract inward capital . It can’t do this without becoming more Western : banking transparancy, currency transparency , a viable stock market, etc.

Dillon Eliassen
Dillon Eliassen
1 month ago

““Free trade” generally tends to benefit the dominant economic power, at the expense of weaker economies. It is no coincidence that the US began preaching “free trade” only after it achieved economic dominance…”
This is so reductive and obtuse that it is completely economically illiterate.

Hans Daoghn
Hans Daoghn
1 month ago

Yesterday I spent about $500 on lawn and yard equipment.  All of it, it turns out, was made in China.  Were there Made in the U.S.A. alternatives to the battery powered chainsaw, the battery powered weed whacker and their proprietary batteries?  No. How about for the relatively low-tech lawn sprinkler? No. We don’t make products like these in the U.S. anymore. Some we never did. 

Biden wants to slap a hefty tariff on imports from China.  Who is going to benefit from that?  Not me.  Not you. The prices we pay for yard equipment and for home appliances are going to soar.  We are about to get another round of Biden-flation.  This will be permanent inflation.  The government will collect the tariffs while we get the Phillips-head treatment.

I have no objection to fencing out Chinese products that the U.S.A. does make such as EV’s and steel. We need to keep and continue investing in those industries.

But once a U.S. made product line is gone or if the Chinese create new products we never made, we shouldn’t slap tariffs on those products as they only punish the U.S. consumer.  And U.S. consumers, already reeling from three years of inflation, can’t afford yet another round.

John Riordan
John Riordan
1 month ago

“But, then, the idea of America as a bastion of the free market, whose corporations achieved global success simply by relying on the animal spirits of capitalism and the sheer ingenuity of garage inventors à la Steve Jobs, is largely a myth. Everyone knows that Silicon Valley’s transformation into a hotbed of innovation, and the subsequent rise of the US tech industry, was made possible thanks to massive funding from the US government and military during the Cold War. Elon Musk is only the latest in a line of supposedly self-made garage inventors who have actually built their tech empire with the help of billions of dollars in US government subsidies. Just last year Tesla received $7.5 billion from the US government. ”

Yes, well, if it was really as simple as Fazi claims here, it’s surely easy for governments to create thriving tech sectors through government research and private sector subsidy. The reality, as becomes obvious after even a cursory look at economic and technological history, is very different indeed. In fact Britain is a prime example of a country that innovates brilliantly with the full support of successive governments, and still cannot create self-sustaining tech industries.

Silicon Valley may well owe its roots to government research and funding, but the ability to turn this into vast export powerhouse tech giants has nothing to with governments: if it did, all governments could do it.